Facebook profit jumps on continued rise in mobile advertising

Growth in mobile advertising has driven a 138 per cent rise in second quarter profit.

ABC News: Nic MacBean

Facebook says its fast-growing mobile advertising business helped drive a 61 per cent increase in revenue in the second quarter.

Overall revenue was $US2.91 billion for the three months ended June 30, which beat Wall Street's estimates of $US2.81 billion in a survey of analysts by Reuters.

Facebook also announced a 138 per cent rise in second quarter profit to $US791 million.

The company's shares have almost tripled in value this year, and closed at $US71.29 cents ahead of the results, which were released after trade closed.

Facebook's newsfeed ads, which inject promotional content directly into a user's own stream of news, have boosted growth and the stock price this year.

More than 30 million small businesses now use Facebook to target their customers.

Chief executive Mark Zuckerberg says the company is working had to attract more corporate clients.

"Our goal here is to make ads as interesting and useful as your friends' content on Facebook," he said.

"We're investing heavily in this area. This quarter we launched a number of efforts to improve the quality and relevance of our ads including our new ads preferences tool, intra-space advertising and improvements in news feed designed to improve low quality content."

The company says it now has 1.3 billion active users each month, and over a billion of those are accessing Facebook on mobile devices.

To maintain its lead, Facebook has made big purchases this year, including social media firm WhatsApp.

However, Mr Zuckerberg has warned it will take some time for its new apps to generate substantial revenue.

"Were still in the early days of building these businesses and expect their revenue contribution to remain small in the near term," he said.

"We remain optimistic as ever about the opportunity to grow revenue by improving the quality and relevance of our apps and increasing the value we bring to marketers through our products, tools and technologies."

Facebook has warned its revenue growth is expected to decline during the remainder of 2014.

"As we saw in the second quarter, our year-over-year growth rate declined from 72 per cent in the first quarter to 61 per cent in the second quarter," Mr Zuckerberg cautioned.

"This is consistent with our comments on the first quarter call when we indicated that over the course of 2014, the year-over-year growth rates in revenue would decline meaningfully as the comps [comparable periods from the previous year] became more difficult. We expect this trend to continue."